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·      Municipal officials pushed a refund for Linked Thoughts Consulting on the Ivy Manor project that was not included in the IDP and therefore unbudgeted for ·      The service level agreement clearly stated that bulk service contributions are payable by the developer to the municipality ·      An allocation of an outstanding R9million was suddenly and suspiciously removed from the 2024/2025 draft budget when the DA questioned it

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Sizwe sama Yende

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City of Polokwane officials bent every rule and law in the book to set a bad precedent by refunding a developer R41.2 million for installing bulk service infrastructure for a new township development.

Developers are always expected to carry the costs for installation of bulk services and recoup their money from the selling price of houses.

However, in the case of Linked Thoughts Consulting (Pty) Ltd, which developed Ivy Royal Manor or Ivy Park Ext 36 in Polokwane, the Limpopo capital city’s officials decided to refund the developer by violating the Municipal Finance Management Act.

The whole transaction was riddled with irregularities from the beginning, as it was never part of the municipality’s Integrated Development Plan (IDP) and therefore not allocated any budget.

Also, there was no council resolution that was taken to reimburse Linked Thoughts Consulting.

HAND WRITTEN NOTE

According to documents detailing the R41 212 525 transaction that The People’s Eye has seen, the service level agreement was patently clear about the developer’s liabilities, which involved paying for bulk services infrastructure.

The service level agreement reads: “In accordance with Council Resolution CR/19/10/11 dated 19 October 2011, bulk service contributions are payable by the developer to the municipality and said contributions are payable before the municipality will give authority for construction of the development to commence, unless alternative arrangement is concluded.”

The People’s Eye understands that all the document pertaining to the transaction have disappeared from the municipality’s files, but a conscientious insider kept a copy.

The documents indicate that the violation of supply chain management processes begins with a hand-written note on the approval on expenditure form dated 20 June 2023. The note states that supply chain management processes should be surpassed. It reads: “As per discussion with ACFO (acting chief finance officer), this is a direct payment. No need to sign under compliance because service agreement is attached.”

Municipal manager, Thuso Nemugumoni, approved the expenditure on 21 June 2023.

An insider has indicated that the rot with the deal goes deeper. He said that there were no technical drawings approved by the municipality and it was not clear what design standards were used.

The bulk services infrastructure was also not recorded in the municipality’s assets register, the insider said.

“This unlawful payment is not based on any policy of the municipality nor was it reported to the auditor-general (AG). In fact, documents of this transaction were hidden hence this matter will never reach the AG,” he said.

NOT ALL DEVELOPERS ARE REFUNDED 

City of Polokwane spokesperson, Thipa Selala, did not answer most of these allegations. Selala said that Linked Thoughts reimbursement was guided by the Spatial Planning and Land Use Management Act (SPLUMA), the applicable SPLUMA By-Law of the Municipality and other town planning instruments.

“Not all developers are automatically reimbursed for the installation of bulk services. Each development application is assessed on its individual merits and in line with relevant municipal policies, statutory frameworks and the specific service delivery needs of the area. Where applicable, contributions or reimbursements may be considered based on formal agreements, alignment with approved development plans and legislative compliance,” Selala said.

Despite the information we have seen, Selala still insisted that the MFMA) and supply chain management (SCM) regulations were followed. The policy he refers to also does not exist.

“The municipality has, in the past, entered into similar infrastructure contribution agreements with developers where such developments align with spatial priorities and where bulk infrastructure benefits extend beyond the development itself. These are managed through engineering services agreements, subject to SPLUMA compliance and oversight mechanisms,” he said.

Linked Thoughts owner, Mokete Rakgogo, said: “The municipality is better positioned to prove the legislative compliance. From my perspective, there were no irregularities. Obviousy, I’m not privy to the municipality’s internal processes and sign offs.”

COUNCIL REMOVED OUTSTANDING R9M FROM 2024/25 BUDGET AGENDA

DA councillor, Jacques Joubert, said that the party was outraged by the revelations of the refund.

“Leaked documentation received by the DA confirm that despite a clear service agreement placing the responsibility for bulk infrastructure on the developer, the Polokwane Municipality inexplicably refunded a substantial portion of the R46 million initially paid by the developer in 2023. This blatant disregard for the agreement raises serious red flags about the decision-making and financial oversight within the municipality,” Joubert said.

He said that when the DA questioned a R9 million payment that was due to Linked Thoughts in council, there was no answer. “During the 2024/2025 draft budget engagements, the DA flagged an allocation of R9.4 million under the capital budget labelled "Ivy Royal Manor"—which appeared to represent the outstanding balance owed to the developer. Alarmingly, once we raised our concerns, this allocation was suddenly and suspiciously removed from the budget tabled to Council,” Joubert said.

Joubert said that the DA would demand immediate clarity on the basis used to justify this payment and insists on a full disclosure of the budget line item or vote that was utilised to facilitate the refund.

LAND SCAM

Linked Thoughts is not new to controversy.

In 2019, Afriforum’s laid criminal charges against Linked Thoughts, the Tshwane Metro, Proco Management, and Faragamo Trading for allegedly selling pieces of land at exorbitant prices – costing the taxpayers R176 million.

Afriforum alleged that Tshwane Metro bought Klipfontein farm for R85. 5 million from Linked Thoughts Consulting.

Linked Thoughts Consulting had bought the farm for R53 million from the original owners on the same day it was sold to the metro council and made a R32 million profit.